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Business Plans vs Strategic Plans

This is the first year of a new business unit within a company. This business unit has a robust Business Plan. Is it necessary to create a Strategic Plan this year? Or can it wait until next year and go through the strategic planning process with the rest of the company?


Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

If the company has already evaluated how it will compete in the marketplace and done a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, I would focus on preparing a solid budget and monitor closely against the budget. A rolling forecast may be in order if the company is growing.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

I found 3 free white papers here at Proformative that address different aspects of planning:

1."15 Common Pitfalls of Long-Range Strategic Planning"
2. "Driving Business Results Through Corporate Financials Planning: a Survey of Finance Professionals"
3. "Best Practices For Planning & Budgeting"


Best... Sarah

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Question: Doesn't your Business Plan include a Strategic Plan. Haven't you identified KPI's as indicators of how well you are proceeding along that plan.

Also I'm sure (and you know what happens when you assume) that your Business Plan had a budget.

That being said, whether you do a formalized or informal SWOT analysis, you should be doing some type at the end of each period. Why would you wait a year if assumptions you made in year 0 are wrong?

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

It depends. In a perfect world, the Strategic Plan comes first and the Business Plan gives the nuts and bolts of how you are implementing the strategy. I have seen exhaustive ("robust") Business Plans that actually include the Strategic Plan. The SWOT analysis is a key component. If not completed already, focus on that area.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Regis, the only perfect world that I know of was created by Sir Thomas More...

Today, it's more like Ben Stiller's Dodge Ball world...

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

I agree with the comments above. You can't get where you want to be if you don't know where you are going.

Be very honest in the SWOT analysis. This exercise is not helpful if you are not very clear about your threats and weaknesses.

Topic Expert
David Wittenberg
Title: Director of Financial Strategy
Company: World Vision
(Director of Financial Strategy , World Vision) |

As already mentioned, the business plan may already include the critical strategic elements and it's just a question of whether to follow internal corporate processes.

One test is to look at the business plan and ask yourself, "Does this explain WHY we expect to be successful?" Does it identify your target customers, their needs and buying habits, and why your go-to-market plan is going to win their business?

If not (e.g. if this is based simply on "We've got a great product"), you might still enjoy success but will likely fall short of the unit's true potential. A year wasted... a year for competitors to catch up or pull ahead.

david waltz
Title: Assistant Treasurer
Company: Integrys Energy Group
(Assistant Treasurer, Integrys Energy Group) |

We are all answering using the terminology. Would it be helpful to clearly define the characteristics that make a "strategic plan" vs. those that make a "business plan"? My guess would be that this differs company by company.

David Mansfield
Title: CFO
Company: Pipestream
(CFO, Pipestream) |

I agree. I have experienced different organizations using these two terminologies interchangeably!
I believe though, that the Strategic Plan should represent a longer term view (usually 3-5 years) and should consider more of the macro view (corporate mission & long term objectives; markets; competitors; SWOT; etc.). This plan would be developed first.
The Business Plan would then be a derivative of the Strategic Plan and would consider the first year of the SP period. It would be a more detailed view than the SP, and would include tactics, objectives, deliverables, timelines, accountabilities, budgets, etc., for actions required to achieve the first year of the Strategic Plan.

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

I would think there was some form of strategic plan developed when the business unit was created. In my opinion, in doesn't have to be formal or detailed, but you should have some road map even if it is on the back of a napkin.

Georg Fendt
Title: CFO
Company: TÜV SÜD Product Service
LinkedIn Profile
(CFO, TÜV SÜD Product Service) |

"Plans are nothing; planning is everything" Dwight Eisenhower

Probably you prepared that robust Business Plan to obtain approval and addressing a particular group of #stakeholders. Now that business is running you might face issues that might or might not have been considered before...

It would be very useful to review where you are and where you are heading to (and comparing versus the original Business Plan). It is very important to consider any ongoing issues/changes since the Business Plan was prepared that might affect positively/negatively the #efficiency of your operation and decide any actions now. The Strategic Plan is your actual roadmap to success and is particularly important during the ramp up phase of any operation.

Best scenario is that the Strategic Plan will match closely what you expected in your Business Plan, but don't be surprised if it doesn't.

If you wait until for the next year's strategic planning process, that new business unit might not exist then.

Michelle Rogers
Title: CEO
Company: Virtually There CFO Services
(CEO, Virtually There CFO Services) |

In my experience, a business plan is simply the quanitification of various business assumptions. In it's simplist form, it's math. At it's most complex, it's identifying a goal post. I work with 5 operating companies who, each year, come up with an annual finanical plan. Some meet their targets, some don't. All never achieve their targets in the fashion that they had envisioned when they put the plan together. The ones that hit their targets monitor the behaviour of critical numbers (key drivers of success) and problem solve their way through opportunities and threats. That's where your strategic plan plays into the financial planning process.

There a numerous ways to approach strategic planning. The most straightforward and effective, that I have found it the 'Rockefeller Habits' by Vern Harnish. The book provides a process to work through developing a strategic plan. A new version will be released in the fall of 2013. The key concepts are understanding the trends, market and your core values. And, using your core values as a way to differentiate yourself in the market so that you don't have to play the price war game which will make it harder to meet your profitability targets. I agree with the previous posts, strategy shouldn't be put off because in doing so, you might just take yourself out of the game; not the competition.

Maria Marsala
Title: Financial Advisor Coach, Speaker, Author
Company: Elevating Your Business
(Financial Advisor Coach, Speaker, Author, Elevating Your Business) |

1) Business Planning
2) Marketing Planning
3) Financial Planning
4) Strategic Planning
5) Exit Planning

In my opinion, they are all very important. When I work with a new business owner, I have them create a 12-month plan that includes both the business development, marketing plan and financial plans. I use a process where they create those items on a single sheet. They also create a SWOT, value proposition, niche, ideal client profile, and pricing strategy.

They are all equally as important as you take your ideas out of your head and put them on paper where you'll eventually finalize them.

Think of it this way... some people are tree people (detailed, in the moment) some are forest people (see the big picture, futurists) and to be the best business owner you can be, you need to look at both.

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